Otago boosts stake in Lyttelton Port

Port of Otago has increased its shareholding in Lyttelton Port in what it says is another attempt to prompt some co-operation between the rivals.

The Dunedin port said yesterday it had raised its stake in Lyttelton Port to 13 per cent and was aiming to ultimately increase the holding to 15 per cent.

Lyttelton Port is the subject of a takeover bid by 69 per cent owner Christchurch City Holdings, which had aimed to acquire the entire port then sell a half stake to Hong Kong port giant Hutchison Port Holdings.

However, Port Otago bought a blocking stake in Lyttelton Port last month and killed the deal between Christchurch City and Hutchinson.

Port Otago is paying $2.24 a share for its stake, above the $2.20 in Christchurch City's bid, which is due to finish tomorrow.

Goldman Sachs JBWere analyst Marcus Curley said Port Otago was probably trying to increase its stake to give it a better chance of blocking any future deal between Christchurch and Hutchison.

But Port Otago chairman John Gilks yesterday reiterated his hope that the two South Island ports could work together.

"We see this as the start of a closer working relationship between Port Otago and Lyttelton," he said.

Lyttelton Port has rebuffed approaches from Port Otago, but Gilks said he hoped talks could start after Christchurch City's takeover finished.

"Let's give it some time, let the emotion go out of it then we'll get some common sense and logic will prevail," he said.

Gilks said he did not expect the increase in the stake to attract the attention of the regulatory authorities. "We're in there for the long haul."